John Glen
MP for Salisbury · Conservative · United Kingdom
“I welcome the Chief Secretary to her new position, but what words of comfort could she give the residents of Salisbury in Wiltshire, a unitary authority? We are not part of a combined authority and we do not have a metro mayor.”
“Sam Moody is my constituent. He is the chief executive of Rockhopper. During my time in this House, he has been absolutely scrupulous in following the laws of this country and respecting the Falkland Islanders.”
“I listened carefully to what the Minister said about the process, and I respect that. But most people who take a pretty level-headed, pragmatic view of the need for a transition over time still cannot get their heads around the short-term reality: when we have so much turmoil in the middle east, why would we extend the time that we are no…”
“It is 55 days till the Budget. Given the market’s reaction to the Prime Minister’s statement on Tuesday, and given that our gilt rates are higher than those of our peers in the G7, could we have a debate on the implications of higher taxes for growth?”
“Before the hon. Lady makes her statement on Thursday, will she, when reflecting on the arrangement in Wiltshire that would embrace Wessex—although we have been told that that is not the Government’s view—address the prevailing concern that the people of rural Wiltshire will be considerably worse off without having the opportunity to embra…”
“I recognise that the Minister wants to come to what the Government are going to do, but does he not accept that the decisions already made in the last two years—with respect to the price of employment and the national living wage, the cost of employment with regard to legislation, and business rates—have depressed the appetite of many sma…”
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“With respect to what happens if there is a deal, the withdrawal agreement Bill will include provision to delay, amend or revoke statutory instruments made under the European Union (Withdrawal) Act 2018, so we would make a decision based on what was appropriate at that time. The hon. Lady asked about the differences between the transition regime for CSDs and full authorisation or recognition under CSDR. While a CSD is within the transitional regime, it will be subject to the recognised clearing house regime in part 18 of the Financial Services and Markets Act 2000. Other legislation, such as the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001, is also relevant.”
“Ladies’ comments, that the Government do not, in any eventuality, see the UK financial services sector trading on some deregulatory arbitrage basis, where we somehow remove ourselves from the context in which we have been so intimately involved within the EU with respect to regulations. The hon. Member for West Ham made reference to the Pittsburgh agreement in 2009 to improve transparency, and we stand by that. A holistic review was undertaken following the crisis and the ESMA rules came into effect to try to address that. On the point about how stable the regulations on central securities depositories will be when needed, we have engaged extensively with the regulators and with industry, and we are confident that we will ensure a stable and functioning regime at the point of exit.”
“I thank the hon. Members for West Ham and for Glasgow Central for their points, and I will endeavour to answer all of them. I recognise that some of the scenarios are obviously not desirable, and I echo their comments about that. We are seeking a deal, and the framework of the deal for financial services would give us provision for early equivalence decisions before the end of the implementation period, and we hope that will happen. We believe that the regulations are necessary to ensure that the UK retains a fully functioning legal regime for the trade repositories and central securities depositories in the event of a no-deal scenario. I also want to make the point, which applies in response to both hon.”
“The UK Government and regulatory authorities will continue to do everything we can to ensure a smooth adjustment for firms and customers on both sides. Unfortunately, as with many of these matters, we cannot determine the EU’s response. That has been a challenge over this period. It is inevitable that, in a no-deal scenario, hostility will break out. It is in the interests of all market participants, regulator-to-regulator, Government-to-Government, to continue to work closely together, because that is in the interest of stability. I believe that has addressed most, if not all, of the points raised.”
“Lady asked about the temporary registration regime, which is intended to allow existing EU trade repositories to continue to provide services to the UK. It allows the new UK legal entities, which are part of an ESMA-authorised group, to submit an application. In terms of the process for that application, she mentioned the drafts on the site. I cannot give her the responses to the letter of 25 October, but I undertake to write to her on that. I need to speak to the regulators to understand where they are with that. The hon. Lady also made a point about the degree of engagement that we have had with the EU. We have had a wide range of discussions with our EU counterparts—I have not personally, but my officials have—on matters relating to our withdrawal from the EU and this matter.”
“The regime that we would be onshoring for the future recognition of third countries would be a matter for us to consider, on the same basis that we would be onshoring EU entities that would have a new legal entity in the UK. It will be the same process, but one that we would essentially have to do domestically, rather than relying on the ESMA framework. I now turn to the points of the hon. Member for Glasgow Central. I acknowledge the recurrent but appropriately made comments about her party’s position. All I can say is that I have tried to conduct this in as professional a manner as possible. The regulators have the resources available. They have a supervisory framework and, through the levy, they have the ability to make the appropriate resources available. The hon.”
“I hope the Committee has found this afternoon’s sitting informative and that it will support these regulations. Question put and agreed to. Resolved, That the Committee has considered the draft Central Securities Depositories (Amendment) (EU Exit) Regulations 2018. Draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018. Resolved, That the Committee has considered the draft Trade Repositories (Amendment and Transitional Provision) (EU Exit) Regulations 2018. —(John Glen.)”
“The existing reporting obligations for both statutory instruments are enduring and have been established for a long time. The issue of reporting into a different legal entity would come to pass following the enablement and the enacting of this regime. The hon. Lady referred to the different parts of the impact assessment and the wider cost of familiarisation. She is absolutely right to draw attention to the undesirability of this additional cost and expense. That is why we do not advocate a no-deal scenario. I am not in a position to give her any more information, because I do not possess it. It will be incumbent on the regulator to send out timely information updates on what will be required. There is no meaningful change in what a market participant will need to do, in terms of the information they will need to share.”
“We need to be clear about the imperative to bear down on the challenge of getting our public finances into a position where we do not add to that debt burden, so that the next generation is in a better situation than when we came into Government.”
“Friend raised a specific point about the sale of the Channel tunnel. The Government’s approach to such matters is that we sell public assets where there is no public policy reason for retaining them, but all asset sales must meet the value-for-money tests set out in the Green Book at the time. It has been difficult to respond fully to today’s debate, given the range of speeches. My hon. Friend made essentially a macroeconomic critique of the Government, while the Opposition Front-Bench Members made a different set of observations, which are perhaps best left to another time. I sincerely acknowledge the need for the Government to come to terms with the fact that in 2019-20 we will still spend £43 billion on net debt interest, which is more than the amount spent on our armed forces.”
“In 2010, the Government inherited a very difficult position in the public finances, with debt having nearly doubled in two years and the budget deficit at its largest since the second world war. We have made significant progress. The deficit has been reduced by four-fifths and debt has begun its first sustained fall in a generation. However, the Government recognise that the job is not yet done, and share the concerns raised today. We must continue to reduce debt to reduce the burden placed on the next generation. The OBR’s October forecast confirmed that the Government are on course to do that, and that we have met our near-term fiscal rules three years early. We will continue with our balanced approach, keeping debt falling while supporting public services, investing in the economy and keeping taxes low. My hon.”
“That report provides a mechanism for Parliament and the public to assess the Government’s strategies for managing the risks, and to hold us to account for their implementation. The report’s publication reaffirms the UK’s place at the international frontier of fiscal transparency and accountability, and supports the Government’s long-term fiscal strategy. The report set out a range of reforms that we are pursuing to reduce risks to the fiscal outlook, including actions to reduce our inflation exposure and tighter controls over the issuance of Government loans and guarantees. Such reforms will enhance the UK’s resilience to future economic shocks and aid in helping to keep debt falling. It is right that actions taken by the Government today do not unjustly impact the next generation.”
“Friend also mentioned debt figures in cash terms for 2010, which his constituent Mr Stewkesbury rightly points out have changed. That change is due to a large number of reclassifications, the largest of which was adopting the European system of accounts 2010, which increased debt by around £100 billion due to the inclusion of Network Rail’s debt and the asset purchase facility and the treatment of public sector bank shares as illiquid. Reclassifications are necessary in the course of following international standards, which are themselves in constant evaluation. The Government’s commitment to responsible management of the public finances was shown this summer, as we published our response to the OBR’s fiscal risks report, providing a detail account of the actions that the Government are taking to address risks to fiscal sustainability.”
“Thanks to the work of the British people to reduce the deficit, debt peaked at 85.2% of GDP in 2016-17 and has now begun its first sustained fall in a generation. It will reach—or, it is anticipated to, given the inherent difficulties of forecast—74.1% of GDP in 2023-24. That progress means that we are in a much stronger position with the public finances than we were in 2010. While it is correct that debt rose after 2010, without the Government successfully reducing the deficit to the extent we have, debt would have been even higher and would still be rising. As my hon. Friend observed, there is a keen contrast between the Government’s balanced approach to paying down the deficit and paying down debt and the Opposition’s proposals to spend £1,000 billion if they assume office. My hon.”
“Friend also observed that, although we have significantly reduced the deficit since 2010, debt rose as a share of GDP over the same period before it peaked in 2016-17. That increase to debt in cash terms and as a percentage of GDP is principally due to the high levels of borrowing that we inherited from the last Administration—a post-war high of 9.9% of GDP, to be exact—which added to our overall debt burden. That could not be fixed overnight. As it was, there was significant resistance to the measures we took to reduce that deficit in the early years in government. We have now reached a crucial turning point, and the deficit has been reduced by four-fifths, from 9.9% when we came in to 1.9% of GDP at the end of the last financial year in April.”
“I reiterate that looking at debt as a percentage of our national income—that is, GDP—is a more helpful way of assessing the public finances as it recognises our ability to afford debt as a nation. Looking at debt as a percentage of GDP adjusts for inflation and our ability to service that debt. It also paints a different picture from the nominal figures and shows that our debt level fluctuated between 20% and 50% from 1973, before significantly increasing at the time of the financial crisis. The fall in debt that we are now seeing as a percentage of GDP, rather than in cash terms, is an important distinction as it recognises that GDP is growing faster than debt. As my hon. Friend says, that is a movement in the right direction. My hon.”
“Looking at net debt rather than gross debt also provides a more accurate picture of the health of the public finances, as it nets off our liquid assets. My hon. Friend also stated in his opening remarks that the Government had reduced the deficit so that we now borrow £1 in £16, compared with £1 in £5 in 2009-10. He may be pleased to know that the figure is actually better than that: the Government now borrow only £1 in every £20 we spend. An important point has been raised about how we measure debt, which I would like to address. The observation is that debt has increased in cash terms since 1973 and that that relates to us joining the European Union.”
“The Government share the concerns expressed today about the level of debt and recognise the importance of reducing it so as not to pass on an unfair burden to the next generation. I am anxious to reassure the constituent of my hon. Friend the Member for South Dorset that the Government are taking this matter seriously and are committed to getting debt down. It may be helpful if I start with a few points of clarification. My hon. Friend observed a number of statistics relating to general Government gross debt. The Government’s chosen metric for debt is public sector net debt, which is a more complete and transparent measure of debt, incorporating a wider range of public institutions than general Government gross debt.”
“It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank my hon. Friend the Member for South Dorset (Richard Drax) and acknowledge the assiduous way in which he has communicated with the Treasury over recent years, sharing the correspondence of his constituent. I welcome this opportunity to address, in as detailed fashion as possible, the points he has raised in his eloquent speech. I pass on my sincere thanks to his constituent for raising his concerns with the Government. I respect those concerns, and it is rare and gratifying to have a member of the public who takes quite such an assiduous interest in the public finances as to spend 5,000 hours studying them. I also thank the hon. Members for West Ham (Lyn Brown) and for Glasgow East (David Linden) for their contributions to the wide-ranging discussion this afternoon.”
“The Treasury published the instrument in draft, along with an explanatory policy note, on 15 August to maximise transparency to Parliament and industry. The Government believe that the proposed legislation is necessary to ensure that the rules governing the UK’s deposit guarantee scheme and the other systems mentioned function appropriately if the UK leaves the EU without a deal or an implementation period. I hope that colleagues will support the regulations, which I commend to the Committee.”
“Finally, the statutory instrument also removes provisions in UK legislation that continue to impose EU obligations on the UK. One such obligation is the requirement on the PRA to notify the European Banking Authority every year of the total amount of protected deposits in the UK. It also fixes definitions and legislative references to the Financial Ombudsman Service in the Financial Services and Markets Act 2000 that would no longer work in a no-deal scenario. Those changes will have no impact on the operations of the Financial Ombudsman Service. The Treasury has been working closely with the PRA, the Financial Conduct Authority and the FSCS on drafting the instrument, and will continue to engage with the financial services industry.”
“In the unlikely scenario that an EEA firm fails just before exit day but a UK depositor has not yet received compensation after exit day, the SI will enable the FSCS to continue to administer payments to UK depositors on behalf of an EEA scheme. That will make it easier and quicker for UK depositors to get their money back. I reassure the Committee that this provision and the changes in the SI will not directly affect members of the general UK population, the overwhelming majority of whom hold their deposits with UK-authorised firms that are FSCS protected. Customers of firms such as Santander UK—that is, UK-incorporated subsidiaries of EEA firms that are authorised and supervised by UK regulators—will continue to be FSCS protected.”
“This mirrors the domestic process for setting the coverage level for insurance and investments, in which the regulators are responsible for deciding the compensation limit, based on their technical judgment and balancing factors such as consumer protection, financial stability and costs to firms. Given the importance of deposit protection for the wider economy and the public interest, changes to the protection level will be subject to Treasury approval. In addition, the PRA will be required to consult on any changes to the level. Secondly, the statutory instrument removes the obligation on the FSCS to administer compensation on behalf of an EEA protection scheme, given that EEA schemes will no longer be obliged to co-operate with the FSCS in a no-deal scenario, with the UK being treated as a third country.”
“The Deposit Guarantee Scheme Regulations 2015, which were part of the UK’s transposition of the directive, need to be updated to reflect that and ensure that the provisions work properly in a no-deal scenario. These draft regulations make three key amendments to the 2015 regulations. First, the SI will transfer the power to set the maximum deposit protection level from EU entities to the UK’s Prudential Regulation Authority. This approach retains the principles of the current EU arrangement by giving the power to the technical body best placed to make a judgment on the necessary level of protection. The PRA is the appropriate body to take on this role, given its technical expertise, and its role under the EU framework in setting a sterling deposit protection level that is in accordance with the EU level.”
“That means that a UK bank’s operations in the European economic area will be FSCS protected, and vice versa: when an EEA firm fails, the customers of its UK business are protected by the relevant EEA scheme. An administrative arrangement in the directive builds on such co-operation. Currently, if an EEA authorised firm were to fail, the FSCS would administer compensation to UK depositors on behalf of the EEA protection scheme. This occurs only after the EEA scheme has provided the FSCS with the funds to be transferred. In a no-deal scenario, the UK would be outside the EEA and outside the EU’s legal, supervisory and financial regulatory framework.”
“Its role is critical in enhancing financial stability and consumer confidence in the banking system. The underlying legislative framework for FSCS protection on deposits stems from the EU’s deposit guarantee schemes directive and our transposing regulations. The EU directive sets the level of deposit protection across the EU at €100,000 and empowers the European Commission to review the protection level every five years. Non-euro countries such as ours can convert €100,000 into the equivalent amount in their national currency. The directive stipulates that deposit guarantee schemes such as the FSCS shall protect their members’ deposits in other member states.”
“The SI will fix deficiencies in UK law on the UK’s deposit guarantee scheme and certain areas of financial services legislation, such as the Financial Ombudsman Service, to ensure they continue to operate effectively post exit. The approach taken in this legislation aligns with that taken in other SIs being laid before Parliament under the 2018 Act: it is to provide continuity by maintaining existing legislation at the point of exit, but amending where necessary to ensure that it works effectively in a no-deal context. Many colleagues are familiar with the financial services compensation scheme, also known as the FSCS—the UK’s deposit guarantee scheme, which compensates savers for up to £85,000 per person when their bank, building society or credit union fails.”
“I beg to move, That the Committee has considered the draft Deposit Guarantee Scheme and Miscellaneous Provisions (Amendment) (EU Exit) Regulations 2018. It is a pleasure to serve under your chairmanship, Mr Austin. As the Committee will be aware, the Treasury has undertaken a programme of legislation to ensure that if the United Kingdom leaves the European Union without a deal or an implementation period, there will continue to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying statutory instruments before Parliament under the European Union (Withdrawal) Act 2018 to deliver that. A number of these SIs have already been debated in this place and in the House of Lords. The SI being debated today is part of that programme, and has been debated and approved by the House of Lords.”
“I thank the hon. Lady for her comments. All I can do in response to her opening remarks is reiterate my commitment as a Minister to continuing the rigorous process of examining the statutory instruments, bringing them to the Committee in a timely fashion, and being as thorough as possible in our impact assessments. The hon. Lady raised two issues. First, she referred to the exchange between Baroness Kramer and Lord Bates in the other place on 6 November, concerning the level at which the PRA could set the compensation. The imperative from the directive has been to have a consistent level, and the UK has onshored, essentially, the €100,000. There are no plans to depart from the current level; frankly, there is a significant imperative to keep the levels aligned, regardless of what happens, but that will be a matter for the PRA.”
“To conclude, the statutory instrument is needed to ensure that the rules governing the UK’s deposit guarantee scheme and the other systems covered by the SI function appropriately if the UK leaves the EU without a deal or an implementation period. I hope I have satisfactorily addressed the legitimate points made by the hon. Lady, and that the Committee will support the regulations. Question put and agreed to.”
“In a scenario of unforeseen volatility, there would be an opportunity for the Treasury to ask the PRA to examine that, or vice versa. In such a scenario, we would of course have more immediate discretion on that point. The second point related to the need to maintain a stable prudential regulatory regime. As the City Minister, I hear lots of representations from different parts of the financial services sector for more flexibility on occasion. This is a matter for the regulator, not me, but in conversations with the PRA, I have made it very clear that the Government do not want to secure competitive advantage based on downsizing our regulatory environment. I agree with the hon. Lady’s sentiments with regard to keeping that as the driving imperative.”
“The statutory instrument makes technical amendments to existing UK legislation, particularly part 8A of the Financial Services and Markets Act 2000, to ensure that the UK can continue to respond to overseas regulators’ requests for information. It is the intention of the UK to preserve as far as possible a mutually beneficial working relationship with the EU, in the same way as we currently co-operate with non-EU regulators under existing provisions in the 2000 Act.”
“The FCA is the appropriate regulator to which to transfer those functions because it has the necessary technical expertise to make technical standards, due to its existing supervisory responsibilities in relation to short selling. Thirdly, the statutory instrument deletes provisions that facilitate co-operation and co-ordination across the European Union. Currently, regulators in member states must notify their counterparts in other member states before taking action to restrict short selling, with other regulators subsequently determining whether to apply similar restrictions. This instrument removes those provisions, along with the powers of the European Securities and Markets Authority to intervene in exceptional circumstances.”
“That means the UK will be able to take action against any instrument traded on a UK venue and, before using those powers, will consider threats solely to UK market confidence and financial stability. Secondly, the statutory instrument transfers to the appropriate UK bodies functions that are currently carried out by EU authorities. For example, there will be a transfer of powers, such as the power to specify when a sovereign credit default swap transaction is regarded as hedging against a default risk, from the European Commission to the Treasury. Powers will also be transferred to the Financial Conduct Authority from EU supervisory bodies. Those include powers that will enable the FCA to make technical standards and take action on all instruments admitted to trading on a UK venue.”
“Additionally, the statutory instrument amends the UK’s powers to address threats to financial stability or market confidence in the context of the SSR. Under the current regulation, the UK can take action on instruments for which it is the most liquid market in Europe or that were first admitted to trading in the UK. If the UK wishes to take action on an instrument that has its most liquid market elsewhere in the European Union or was first admitted to trading on an EU venue, it is required to seek consent from the relevant EU regulator. The statutory instrument deletes that provision so that those instruments will be treated in line with other third-country instruments.”
“Given that the UK would be outside the EEA and the EU’s legal, supervisory and regulatory framework in a no-deal scenario, the existing legislation needs to be updated to reflect that and amended to ensure that its provisions work properly in such a scenario. The statutory instrument will therefore make a number of amendments to the SSR and related legislation, including certain parts of the Financial Services and Markets Act 2000, to ensure that they continue to operate effectively in the UK once the UK has left the EU. First, the statutory instrument amends the scope of the regulation so that it relates only to instruments admitted to trading on UK venues and UK sovereign debt. Financial instruments admitted to trading only on EU venues will no longer be in the scope of UK regulation.”
“The statutory instrument is another part of that programme of legislation. Short selling is the practice of someone selling a security that they borrowed, with the aim of buying it back at a lower price than they sold it for. Following the financial crisis, a number of countries, including the UK, acted to suspend or ban short selling due to the risks it posed to the stability of the global financial system. In response, the EU introduced the short selling regulation—the SSR—which introduced a harmonised regulatory framework for short selling and certain aspects of credit default swaps. That regulation relates to financial instruments that are admitted to trading or traded on a European economic area trading venue.”
“I beg to move, That the Committee has considered the draft Short Selling (Amendment) (EU Exit) Regulations 2018. May I say what a pleasure it is to serve under your chairmanship, Mr Robertson? It is a pleasure to be here again to introduce a statutory instrument. I thoroughly enjoyed the preparation for this debate. In the context of the UK’s withdrawal from the EU, the Treasury has been preparing extensively for a range of potential outcomes, including a no-deal scenario. This statutory instrument forms part of the work that is necessary to ensure that there continues to be a functional regulatory and legislative regime for financial services if the UK leaves the EU with no deal and no implementation period. As colleagues are aware, we have had a number of debates in the House as part of that process.”
“The instrument makes amendments that will enable UK credit default swaps to be used by market participants to hedge correlated assets and liabilities anywhere in the world, rather than solely in the EU. That will ensure that UK firms can continue to use UK sovereign credit default swaps to hedge correlated liabilities or assets issued by issuers in the EEA and, in future, across the rest of the world, too. In summary, the Government believe that this SI is necessary to ensure that the regulatory regime relating to short selling and certain aspects of credit default swaps works effectively if the UK leaves the EU without a deal or an implementation period. I sincerely hope that colleagues will join me in supporting the regulations; I commend them to the Committee.”
“Market makers will be required to join a UK trading venue and notify the FCA at least 30 days before exit should they wish to benefit from the exemption. However, the operators that have already done that will not experience a change. The instrument deletes the conditions in the current regulation that must be met to be able to correlate sovereign issuer positions to sovereign debt. To determine sovereign debt correlation under SSR that can be used to offset the positions of sovereign issuers, those conditions are currently used. The deletion reflects the fact that the UK will be the sole sovereign issuer in question post-exit. The instrument will also provide the Treasury with the power after exit to set the relevant thresholds.”
“Those will be maintained, and the FCA will now take on responsibility for publishing a list of relevant third country shares that are subject to the exemption—a responsibility that currently rests with the European Securities and Markets Authority. To ensure continuity at the point of exit, the FCA will recognise the ESMA list for two years following exit day, so that there will be no change to the exemptions. Additionally, the SI maintains the exemption for market makers and authorised primary dealers under SSR. This exemption enables firms to carry out certain primary market operations and market-making activities without the requirement to disclose their net short position. Moreover, provided that they meet certain thresholds, those operators are not required to comply with relevant restrictions on uncovered short selling.”
“I can confirm that the Treasury worked very closely with the FCA before publication of this SI on 9 August. Over the two months before the regulations were laid on 9 October, we took feedback from industry and the regulator, and we are confident that they are in a very strong position to deal with the requirements that they would be given in the context of a no-deal outcome subsequent to the SI. Let me make some progress—I am nearly there. The instrument maintains a number of existing exemptions. The current regulation provides exemptions from certain reporting requirements, restrictions on uncovered short selling for shares that are traded primarily in a third country, and the buy-in regime.”
“An impact assessment has also been made, which will be published later today.”
“I will seek to address the specific points raised, but in response to the hon. Members for Stalybridge and Hyde and for Glasgow Central it is worth repeating that the Treasury is taking this exercise very seriously, and a lot of work and rigour is going into the SIs and the consultation process that goes with them. It is obviously exacting to get on top of all the details about what needs to happen, but each SI is taken seriously and there is a process of engagement, in this case with trading venues such as the London Stock Exchange, the FCA, the Bank of England and those who participate in the market. In response to the first question from the hon. Member for Stalybridge and Hyde, a considerable amount of work was done over that two-month period before the SI was published.”
“I understand the hon. Lady’s concern, and this reflects the unusual nature of the process. The Treasury has made five impact assessments on these SIs, and I have been in dialogue with the Regulatory Policy Committee about the unusual nature of this process and the contingency arrangements for no deal. Those impact assessments will be published in due course.”
“The issues with impact assessments are extremely complicated, and we have taken the time needed to ensure that they are as robust as possible in a very constrained timeframe. This is not an optimal process, and I and my fellow Ministers and officials are doing everything we can to bring the impact assessment process to the scrutiny of the House as quickly as possible. The hon. Lady is correct—ideally we should have published these impact assessments sooner. We have proactively sought to engage Members on the issues with the SIs, anticipating concerns that may be raised, and we are doing everything we can. [ Interruption. ] I cannot give more comfort, I am afraid, but I am happy to give way if the hon. Lady thinks we can edify the Committee further.”
“From my conversations with my counterparts in European countries, I know that they wish us to have a strong relationship even in a no-deal situation. I believe the lines of communication are open and the UK has been a force for good in securing high-quality regulations. In conclusion, I believe that this SI is necessary to ensure that the regulatory regime relating to short selling and certain aspects of credit default swaps will work effectively if the UK leaves the EU with neither a deal nor an implementation period. I hope the Committee has found this morning’s sitting informative and will join me in supporting the regulations. Question put and agreed to.”
“Processes such as notifying a regulator of net short positions under the SSR will remain the same, and market makers in the UK will continue to report to the FCA in the same manner as they currently do under the European Security and Markets Authority, which delegates its implementation powers to the national competent authorities. In this country that is the FCA, so the FCA is equipped and ready to do that. General concern was expressed about whether this means that we will go down a deregulatory route in a no-deal situation. It is my instinct, and, I think, that of the regulator, that we would wish to remain closely aligned. A no-deal situation, as undesirable as it is, does not mean we are in a situation of hostility.”
“The Treasury is well equipped to make those judgments and will do so in a no-deal situation, as part of a larger piece of financial services regulation. The hon. Member for Glasgow Central quite legitimately raised concerns, as she has done on a number of occasions, about the FCA’s capacity to carry on the functions of EU bodies to implement this instrument and the resources available. I can reassure her once again that those resources are available. The FCA does have the resources to account for the additional work.”
“I undertake to continue to do everything I can to bring these impact assessments to the House as quickly as possible in the imperfect conditions that we have. Where possible, we will do that, but I also have to balance that with ensuring that the statutory instrument that I bring before the House is fit for purpose, because the objective is to provide a contingent regime in a no-deal scenario that is fit for the market and avoids the instability that we wish to avoid. Turning to the second point by the hon. Member for Stalybridge and Hyde on thresholds, he asked me to elaborate on the transfer of powers from the European Commission to the Treasury. This SI onshoring process does not permit us to specify additional changes in policy.”